03 JULY 2013 BY STEPHANIE MILES
Merchant: Federal Donuts
Location: Philadelphia, Pennsylvania
Size: 2 Locations
Cost: Under $1,000
Bottom Line: Reliability and cost are both important factors in a merchant’s decision to switch from hardware to a cloud-based POS system. As a seasoned restaurateur, Steven Cook already knew that traditional hardware-based point-of-sale systems could be overly expensive and unreliable when he opened Federal Donuts — a shop that sells cake donuts and Korean style fried chicken — in late 2011. What he didn’t know at the time, however, was that there were alternative options for quick-service restaurants. “[My partners] come from traditional restaurant, full-service restaurant backgrounds, and we are used to hardware based POS systems and traditional credit card processors,” said Cook. “In setting up the first Federal Donuts, it was a very low budget thing. We went with, I guess, an off-brand sort of POS company. It was sort of a disaster.” Cook says his hardware-based POS system was unreliable and prone to crashing at inopportune times. “When there are customers waiting in line, it takes staff time away from serving customers,” said Cook. “And then, it’s frustrating to customers when you can’t pay with credit cards.” After hearing about Square from contacts in the local business community, and seeing how well the service was working at a coffee shop owned by one of his business partners, Cook decided it would be worth trying out the cloud-based system at Federal Donuts in the summer of 2012. “Unlike a lot of POS systems that are, in my opinion, not knowing anything about technology, very clunky — a lot of code written on top of code written on top of code — this was something that was fresh and not bogged down by old architecture.” By the time Federal Donuts opened its second location in late 2012, online functionality had become even more important to the business. Cook and his partners needed a...
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